Which of the following countries would be least likely to experience rampant corruption?

A) a country with minimal laws against corruption
B) a country that widely publicizes its financial accounting
C) a country run by a military dicatorship, with no elected leaders
D) a country with high trade barriers and limited regional commerce

country that widely publicizes its financial accounting

Moral principles and values governing behavior regarding right and wrong are known as

ethics

Which of the following is an example of a corporate human rights violation?

A) operating a factory that pollutes the air
B) selling a defective product
C) operating a sweatshop factory
D) failing to make foreign tax payments

operating a sweatshop factory

The process of reproducing assets without compensating those who originally created them is known as

counterfeiting

Which of the following protects books and software from unauthorized use?

copyright

A ________ is a right granted to the inventor of a product or process that excludes others from making, using, or selling the invention.

patent

The Nike “Swoosh” is an example of a(n) ________.

trademark

A copyright is granted for ________ but not for ________.

works of art; manufacturing processes

A firm is hired by an entertainment company to investigate piracy of its entertainment software in countries abroad. The firm develops a list of countries to investigate based with estimated piracy levels of 90% or higher. Which of the following is most likely on the firm’s list?

A) India
B) Russia
C) China
D) Mexico

China

Which of the following countries has the highest level of piracy in records and music?

A) China
B) Malaysia
C) India
D) Brazil

china

In India, estimated losses from copyright piracy are greatest in which of the following industries?

An international human rights organization recommends that its member countries review their human rights policies on a periodic basis to ensure that their governments are upholding ethical standards for the treatment of prisoners. Which of the following represents the most effective reasoning in support of the organization’s recommendation?

A) Ethical policies and practices tend to remain consistent within the same country over time.
B) Nations should only enforce ethical standards that have been approved by other nations.
C) Nations should enforce those ethical standards that have been adopted in other nations.
D) Ethical standards change over time, so national policies should be updated as necessary.

Ethical standards change over time, so national policies should be updated as necessary.

An ethical relativist would most likely argue that ethical truths are ________.

A) consistent in application
B) different from group to group
C) based on ancient principles
D) absolute across societies

different from group to group

An individual who believes in ethical normativism views ethical truths as ________.

The stakeholders of a company include all of the following except ________.

A) loyal customers of the company’s main competitor
B) members of the company’s board of directors
C) the company’s CEO and senior managers
D) individuals who are company shareholders

loyal customers of the company’s main competitor

In a meeting of its senior management, a cigarette company reviews its plans to expand into several emerging markets. One executive suggests that targeting these markets may raise potential CSR concerns. Other attendees at the meeting dismiss the idea. Which of the following is the most effective response the executive could give to support his point regarding CSR concerns?

A) Women are an untapped group of potential cigarette consumers in emerging markets.
B) The GDPs of target countries may suffer from the burden of increased health care costs.
C) Cigarette sales have declined in many of the advanced economies in recent years.
D) Advertising that portrays smoking as “hip” will be most likely to appeal to young consumers.

The GDPs of target countries may suffer from the burden of increased health care costs.

39) Which of the following would most likely be considered an appropriate action for a multinational company in meeting its global corporate social responsibility obligations?

A) lowering production costs for specific manufactured items
B) improving the efficiency of assembly line operations
C) developing a strategic plan to enter an emerging market
D) offering jobs to assist local workers in rising out of poverty

offering jobs to assist local workers in rising out of poverty

Which of the following makes it more difficult for companies to implement global CSR measures?

A) The UN Convention on the Rights of the Child defines specific standards for global CSR.
B) Most international companies agree on the importance of improving access to quality education.
C) Company stakeholders often have conflicting expectations regarding business accountability.
D) Solutions to social and environmental problems are typically clear cut for headquarter managers.

Company stakeholders often have conflicting expectations regarding business accountability

The practice of meeting humanity’s needs without harming future generations is known as

sustainability

Which of the following would most likely be considered a sustainable business practice?

A) It guides employee behavior in all situations.
B) It guides employee behavior in some, but not all, situations.
C) It is usually a poor guide for employee behavior.
D) It is a cure-all for ethical dilemmas.

In the four-step framework for making ethical decisions, when should a decision be implemented and evaluated?

A) immediately after the facts of the situation are obtained
B) as the first step in the decision-making process
C) immediately after all relevant persons have been consulted
D) after alternative courses of action have been evaluated

after alternative courses of action have been evaluated

When using the four-step framework for making ethical decisions, which step involves investigating which individuals have a stake in the outcome?

When making decisions regarding ethical business actions, managers should do which of the following?

A) focus predominantly on whether the actions uphold accepted standards of fairness
B) focus mainly on the company’s obligations to produce profits for its shareholders
C) place the highest emphasis on the company’s ability to benefit the common good
D) balance their obligation to shareholders with contributions to the public good

balance their obligation to shareholders with contributions to the public good

Which of the following is a policy platform for companies committed to sustainability and CSR?

A) the Organization for Economic Cooperation and Development
B) the United Nations Global Compact
C) the International Economic Development Council
D) the Global Competitiveness Report

the United Nations Global Compact

Corporate managers must adhere to the laws of the country in which they do business.

true

Most democracies also include elements of socialism.

true

Market forces and free trade are encouraged in democracies and are supported by legal systems that apply fair and equal treatment to all citizens.

true

Common law originated in Rome and can be found in France, Germany, and Latin America.

false

Like most legal systems, Islamic law evolves with changing times to better meet the needs of Islamic society.

false

Government agencies, institutions, and public officials influence the manner in which foreign firms conduct business.

true

The European Union impacts international trade and business because of its ability to enact and enforce laws and regulations.

true

Expropriation is the term used to describe a host-country government seizing the assets of a foreign corporation and providing no compensation in return.

false

Embargoes are a policy tool used to forbid trade with particular countries.

true

A foreign firm’s entry strategy, operations, and performance are often dictated by foreign investment laws.

true

Manufacturers and sellers face legal penalties and lawsuits due to product safety and liability laws that ensure accountability for damage, injury, or death from defective products.

true

Employees working in foreign nations are used by firms to evaluate the political and cultural environment for any potential risks or threats which might harm the firm and its international interests.

true

The protection of intellectual property rights is guaranteed and enforceable in nearly every country in the world.

false

All of the following are ways that firms can benefit from a foreign market’s political and legal systems except ________.

A) tax holidays
B) subsidies
C) legal protection
D) cash incentives

) legal protection

A company’s potential loss of profitability caused by a nation’s political or legal setting is known by which of the following terms?

An individual from a country with a high degree of political risk might most likely be from which of the following?

A) Canada
B) Singapore
C) Iraq
D) Japan

Iraq

An individual from a country with a low degree of political risk might most likely be from which of the following?

A) Venezuela
B) Canada
C) Zimbabwe
D) Iraq

canada

Which of the following helps explain why India was once characterized by high country risk?

A) Taxes and financial incentives benefit Indian businesses over foreign firms.
B) Indian business leaders distrust most European corporations.
C) Political leaders enacted laws targeted against foreign firms.
D) Indian leaders fear the modern influences of American firms.

Political leaders enacted laws targeted against foreign firms.

A political system includes each of the following except ________.
A) lobbying groups
B) trade unions
C) legislative bodies
D) investment banks

Totalitarian states are characterized by all of the following except ________.

A) dictator-led state political party
B) state-supported religious ideology
C) state-regulated public behavior
D) free flow of information in the mass media

free flow of information in the mass media

Which of the following is the underlying principle of socialism?

A) The welfare of individuals far outweighs the welfare of society.
B) The well-being of the group supersedes the well-being of individuals.
C) The rights of individuals should be balanced with societal needs.
D) The state should protect itself from individual and group interests.

The well-being of the group supersedes the well-being of individuals.

Which form of government is characterized by private property rights and limited government?

A) autocratic
B) democratic
C) socialist
D) totalitarian

democratic

What has been the impact of social democracy on international business relations in some European countries?

A) preventing businesses from shipping their products to foreign markets
B) reducing sales and requiring additional public relations activity
C) destroying the ability of a firm to carry on normal business operations
D) raising concerns about a firm’s foreign operations by initiating lawsuits

reducing sales and requiring additional public relations activity

All of the following industries are particularly vulnerable to the threat of terrorism except

A) agriculture
B) entertainment
C) retailing
D) travel

agriculture

United States laws limit foreign investments that might affect which of the following areas?

A) enforcing strict stipulations on cross-border transactions and joint ventures
B) limiting the amount of net income and dividends that can be transferred to the home-country headquarters
C) restricting the amount of money that can be re-invested into the foreign facility
D) imposing restrictions on the distribution of products from the foreign facility

limiting the amount of net income and dividends that can be transferred to the home-country headquarters

Which of the following terms is used to refer to the application of home-country laws to conduct outside of national borders?

South Korea has become a global leader in which of the following industries?

A) textiles
B) automobiles
C) pharmaceuticals
D) electronics

electronics

Outsourcing certain value-added activities with foreign suppliers is known as ________.

offshoring

All of the following are examples of global sourcing except ________.
A) Mexican autoworkers manufacture generators in Mexico for General Motors
B) Japanese workers are employed at a Toyota plant in central Japan
C) Microsoft employs skilled workers in India for computer programming
D) Massachusetts General Hospital employs doctors in the Philippines to read x-rays

Japanese workers are employed at a Toyota plant in central Japan

Which of the following explains why per-capita GDP converted at market exchange rates inaccurately depicts the potential of an emerging market?
A) The market exchange rate does not take into consideration distribution and production costs for each nation.
B) Products and services in emerging markets are priced significantly lower than they are in advanced economies.
C) The per-capita GDP converted using PPP exchange rates provides a precise measure of consumer buying potential.
D) Products manufactured in emerging markets are priced less than products that are imported outside of an economic bloc.

Products and services in emerging markets are priced significantly lower than they are in advanced economies.

Purchasing power parity tells us ________.
A) what a unit of local currency can buy in its home country
B) the value of goods and services that can be purchased with one unit of a country’s currency
C) the relative ability of two countries’ currencies to buy the same basket of goods in those two countries
D) what a currency can actually buy in real terms

the relative ability of two countries’ currencies to buy the same basket of goods in those two countries

Which of the following best describes the concept of purchasing power parity (PPP)?
A) In emerging markets, the ability to buy goods and services depends on the influx of FDI from international MNEs.
B) The fluctuation in exchange rates disrupts international trade because the value of goods and services is inconsistent.
C) In the future, a world currency will create equality in the global marketplace and eliminate disparity.
D) Eventually, the exchange rate of two currencies will be equalized and the same goods will have the same price in two countries.

D) Eventually, the exchange rate of two currencies will be equalized and the same goods will have the same price in two countries.

The GDP per capita of Country A is less than that of the United States. Which of the following reflects the GDP per capita of Country A?

A) $49,700
B) $36,500
C) $48, 900
D) $50,300

36,500

If the GDP per capita of Country A is adjusted for purchasing power parity (PPP), the country’s revised GDP is higher than that of the United States. Which of the following could be the GDP of Country A, adjusted for PPP?

A) $46,500
B) $39,700
C) $49,300
D) $47,000

49,300

Which of the following terms is used to refer to unofficial economic transactions?

informal economy

In purchasing power parity terms, which nation has the highest per-capita GDP?

A) Brazil
B) China
C) Turkey
D) South Korea

South Korea

Which of the following will most likely be the result of an increased number of middle-class households in emerging markets?

An emerging market’s lack of transparency may suggest which of the following?

A) accountability
B) bureaucracy
C) corruption
D) expertise

corruption

45) Which of the following is a benefit to foreign firms that form alliances with local companies in emerging markets?
A) protection against bribery
B) more rapid customs clearance
C) information about the local market
D) strategies for exporting goods

information about the local market

All of the following are typical characteristics of family conglomerates except ________.
A) highly diversified
B) wholly owned or controlled by the government
C) known in South Korea as chaebols
D) easier access to capital than most firms

wholly owned or controlled by the government

Which of the following best explains why a family conglomerate (FC) might pose a challenge to firms trying to enter emerging markets?
A) FCs have superior knowledge in manufacturing and distribution.
B) FCs pay no tariffs in exchange for providing employment opportunities.
C) FC owners often hold positions of power within national governments.
D) FCs may control large market shares in several industries within a nation.

FCs may control large market shares in several industries within a nation.

Which of the following best explains the growth of family conglomerates in emerging markets?
A) domestic investment
B) foreign investment
C) competitive market
D) government protection

government protection

Which of the following is a benefit to a foreign firm collaborating with a family conglomerate in an emerging market?
A) reduced capital requirements
B) improved taxation status
C) protected intellectual property
D) limited counterfeiting risks

reduced capital requirements

Which of the following terms is used to refer to a government entity’s request for bids from suppliers?
A) quotes
B) estimates
C) tenders
D) microloans

tenders

Which of the following characteristics best equip new emerging market MNEs to compete against MNEs that have long-term experience in the global market?
A) brand recognition, large market share, and skilled workers
B) low-cost labor, family conglomerates, and government support
C) market research, customer service, and brand loyalty
D) government funding, high wages, and value-chain diversification

low-cost labor, family conglomerates, and government support

All of the following characterize the Grameen Bank except ________.
A) over 2,500 branch banks
B) provides small loans
C) started in India in 1974
D) concept of the Gates Foundation

concept of the Gates Foundation

Which of the following best summarizes the argument in favor of microfinance?

A) Microfinance ultimately leads to greater tax revenues for national governments.
B) Microfinance don’t need to be paid back in the event the borrower goes bankrupt.
C) Microfinance allows the underprivileged to create businesses and improve their lives.
D) Microfinance alleviates the pressure on MNEs to support developing economies.

Microfinance allows the underprivileged to create businesses and improve their lives.

Which of the following trends supports improving economic conditions in Africa?

) Which of the following is the term for checkpoints at the ports of entry in each country where government officials inspect imported products and levy tariffs?
A) domestic lines
B) customs
C) quotas
D) duties

customs

A government policy that impedes trade through means other than explicit taxes is known as a ________.
A) quota
B) tariff
C) price restriction
D) nontariff trade barrier

nontariff trade barrier

Which of the following is a nontariff trade barrier?
A) import duty
B) franchise tax
C) quota
D) export duty

quota

A quantitative restriction on specific imports for a set period of time is known by which of the following terms?

A) tariff
B) quota
C) investment barrier
D) country risk

quota

All of the following are country risks in international business except ________.
A) government bureaucracy
B) inadequate law enforcement
C) government mismanagement
D) currency exchange rate

currency exchange rate

Which of the following is often a result of protectionist policies?
A) higher prices of domestic goods
B) lower prices of domestic goods
C) shortage of domestic goods
D) surplus of domestic goods

higher prices of domestic goods

Which of the following is a rationale for governments imposing offensive trade and investment barriers?
A) the protection of domestic industries
B) the promotion of national security
C) the pursuit of public policy objectives
D) the support of special interests

Tariff-based trade barriers can benefit young domestic-based companies by ________.
A) allowing them time to expand and become competitive
B) providing them with government subsidies
C) instigating the growth of a solid infrastructure
D) generating domestic and international sales

allowing them time to expand and become competitive

Governments impose export controls for the purpose of ________.
A) improving available opportunities for domestic sales
B) limiting the number of exported products to certain countries
C) preventing the export of security-related products to specific nations
D) restricting the export of products to all nations during wartime

C) preventing the export of security-related products to specific nations

Nations that initiate strategic policies for the development of high value-adding industries often do all of the following except ________.
A) subsidize investments in high-tech industries
B) invest in the public education system
C) encourage citizens to save money
D) fund large-scale public works projects

How much money is estimated to be lost in trading opportunities every year due to trade barriers?
A) $1 billion
B) $10 billion
C) $100 billion
D) $200 billion

100 billion

Which of the following is an effect of administrative and bureaucratic procedures?
A) generates government revenue
B) slows down the import of products
C) blocks the entry of imported products
D) reduces the quantity of available goods

slows down the import of products

Which of the following terms is used to refer to the worldwide classification system used to determine a product’s tariff?
A) harmonized tariff
B) protective tariff
C) revenue tariff
D) specific tariff

harmonized tariff

Tariffs which are ad valorem are ________.
A) based on the weight or size of the imported product
B) assessed as a percentage of the imported product’s value
C) intended to provide a steady flow of income for the government
D) levied on specific imported and exported products

assessed as a percentage of the imported product’s value

Mexico eliminated nearly all tariffs on product imports from the United States as a result of which of the following?
A) FDI
B) WTO
C) GATT
D) NAFTA

NAFTA

Which of the following is considered a major driver of market globalization?
A) tariff reductions
B) government subsidies
C) countervailing duties
D) prohibitive tariffs

tariff reductions

Nontariff trade barriers have increased in popularity in part because they ________.
A) generate profits for foreign firms
B) can be concealed from the WTO
C) are easy for governments to enforce
D) reduce smuggling along borders

can be concealed from the WTO

An import license can best be defined by which of the following?
A) an expensive requirement for new importing firms
B) a government fee to facilitate import processing
C) a complicated system of establishing quotas
D) a costly government permit to import goods

D) a costly government permit to import goods

The rules of origin requirement can best be defined as which of the following?
A) a voluntary quota in which a firm agrees to limit some exports
B) a formal permission must be obtained to import specific goods
C) a certain amount of production must occur within an economic bloc
D) a set number of exports must originate from either a bloc or a region

a certain amount of production must occur within an economic bloc

Which of the following is a frequent problem in national customs agencies?
A) a shortage of customs agents in airports
B) inconsistent product classification
C) arbitrary tariffs and duties
D) customs agents who fail to understand contemporary trade issues

B) inconsistent product classification

Which of the following is occasionally used to offset subsidies?
A) prohibitive tariffs
B) investment incentives
C) countervailing duties
D) antidumping duties

countervailing duties

Which of the following is an example of a government procurement policy?
A) requiring airline carriers to offer reduced rates for government travel
B) imposing additional import taxes on non-domestic made products
C) offering tax breaks to manufacturers that purchase domestic components
D) requiring government cars be purchased from domestic automakers

requiring government cars be purchased from domestic automakers

The Index of Economic Freedom uses all of the following criteria in its assessment except ________.
A) rule of law
B) infrastructure
C) level of trade barriers
D) level of business regulation

infrastructure

41) Which of the following countries has the highest degree of economic freedom?
A) Australia
B) China
C) Brazil
D) Venezuela

Australia

42) Which of the following countries has the least amount of economic freedom?
A) South Korea
B) Mexico
C) North Korea
D) Botswana

All of the following occurred as a result of the Smoot-Hawley Tariff Act except ________.
A) bank closures
B) record high tariffs
C) normal trade relations
D) fewer farm exports

normal trade relations

) Import substitution failed during the 1950s in Latin America because ________.
A) products manufactured domestically were not of the same quality as imports
B) protected enterprises required constant subsidizing and never competed globally
C) high quotas and tariffs did not generate enough revenue to support the government
D) local manufacturing firms required parts and labor from other nations

Each of the following nations enjoyed success as a result of export-led development except ________.
A) North Korea
B) Hong Kong
C) Taiwan
D) Thailand

North Korea

Tariffs helped Japan rise from poverty after World War II by ________.
A) subsidizing automobile and shipbuilding firms
B) encouraging the development of importing firms
C) increasing revenue for national strategic policies
D) protecting the nation’s infant industries

protecting the nation’s infant industries

Which of the following entry strategies do most firms use if high tariffs are not an issue?
A) FDI
B) licensing
C) joint ventures
D) exporting

exporting

Firms use foreign trade zones in order to ________.
A) stimulate local economic growth and development
B) take advantage of favorable customs regulations
C) create employment opportunities for locals
D) meet quota demands established by the government

take advantage of favorable customs regulations

Which of the following is a method used by some manufacturers to avoid paying high tariffs?
A) produce a small number of high-quality items
B) produce a large number of less expensive items
C) employ low-cost workers in the export location
D) ship products to fewer international locations